Most stop signs also have a large white stop bar painted across the lane to indicate that driver needs to stop. However, at an uncontrolled T intersection, the driver on the street which ends must yield the right-of-way to vehicles and pedestrians on the cross street. So even though the stop sign was down, the driver still should know to stop.
In Episode 8, Clay told Tony that he had never seen a dead body, but in this episode it is revealed that Clay was the first on the scene where he saw Jeff's body the night he had the fatal accident.